Suppose Hong Kildong, the King of Yuldo, imposes an additional payroll tax on the government employees....
Suppose Hong Kildong, the King of Yuldo, imposes an additional payroll tax on the government employees. (We know Hong Kildong does not like the governmental officials.) He decides to throw the additional tax revenue into the East Sea near Dokdo as he believes that the only purpose of the tax is to penalize the government employees. Assume that there are only two sectors (Governmental and non-governmental sectors) and two perfectly mobile factors (capital and labor), and that all the productivity levels of all the employees are identical. Using diagrams will help you answer the following questions.
1. Do the workers in the non-governmental sector share some of
tax burden?
2. How does the equilibrium employment level in the non-government
sector change after
the tax is imposed by Hong Kildong?
Now suppose the two sectors have the same elasticities of
substitution between capital and labor.
Also assume that the two sectors have the same capital-labor
ratios, and that the slopes of the
isoquants on any points that lie on the same ray from the origin
are all the same as we did in class.
3. How would the output effect affect r/w?
4. How would the factor substitution effect affect r/w?
5. What would be the combined effect on r/w?
6. To what extent would the burden be shifted from labor to
capital? Will K and L bear a
proportional burden? Will K bear a greater burden? Will L bear a
greater burden?
7. To what extent would the burden be shifted from labor to capital
if the governmental
sector were relatively labor intensive?
8. To what extent would the burden be shifted from labor to capital
if the two sectors had
the same factor intensities but the elasticity of substitution in
the governmental sector was
zero?
Homework Answers
1. In each and every country taxes are necessary if imposed to pay the government as its the very main source of revenue generation for givernment. Weather additional taxes on government officials are imposed or not non governmnet employees have to share or pay the burden of taxwhich is imposed on them.
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Suppose Hong Kildong, the King of Yuldo, imposes an additional
payroll tax on the government employees....
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some conclusions and contributes of this paper. I need this for my
Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS
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I need Summary of this Paper i dont need long summary i need
What methodology they used , what is the purpose of this paper and
some conclusions and contributes of this paper. I need this for my
Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS
PLEASE !!!)
Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...
Which of the following best describes the relationship between a
stock concept and a flow concept?
A stock concept has a time period
associated with it, whereas a flow concept is an amount of
something at a given point in time.
A stock concept is an amount of something at a given point in
time, whereas a flow concept has a time period associated with
it.
______________________________________________________________________________
What expenditure category of production is largest for most
countries?
Investment
Consumption
Net...
Because of its inability to control film and personnel
costs in its radiology department, Sanger General Hospital wants to
replace its existing picture archive and communication (PAC) system
with a newer version. The existing system, which has a current book
value of $2,250,000, was purchased three years ago for $3,600,000
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eight-year life to a salvage value of $0. This system could be sold
for $800,000 today. The new PAC system...
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